Several days after announcing a $2 billion loss in its chief investment office, JPMorgan Chase is clearing house.
Matthew E. Zames, the JPMorgan executive who was tapped Monday to replace the outgoing chief investment officer, Ina Drew, announced several top leadership changes in the unit on Monday afternoon, according to an internal memo obtained by DealBook.
Achilles Macris, the executive who led the London-based group that made the ill-fated trade, will step down as chief investment officer of the European arm, according to the memo.
Rob O’Rahilly will lead the firm’s chief investment office in Europe, the Middle East and Africa, while Christopher Chan will lead the office in Asia. Marie Nourie will take over the chief financial officer position within the global unit, and Chetan Bhargiri will serve as chief risk officer of the reformed group.
“I am proud of the firm’s efforts over the past several days to address our mistakes and pleased to join the dedicated employees in our Chief Investment Office today,” Mr. Zames wrote in the memo to employees. “Together, we will have a sharp, renewed focus on our hedging strategies, risk management and execution. JPMorgan Chase will come out of this experience as a stronger firm.”
Mr. Zames, 41, is an experienced trader with a history of staring down risky situations. He served as a trader at Long-Term Capital Management, the hedge fund based in Greenwich, Conn., that blew up and had to be rescued in a 1998 bailout. He then moved to Credit Suisse before landing at JPMorgan, where he was part of the team that bought a failing Bear Stearns in 2008, at the depths of the financial crisis.
In an interview on Monday, Mr. Zames reflected on how the previous crises he had experienced, including his front-row seat for the Long-Term Capital Management implosion, had informed his view of financial risk.
“I’ve never forgotten the lessons of 1998,” he said. “This is not all that similar to Long-Term, frankly.”
Mr. Zames will be responsible for the chief investment office as it attempts to stem the losses from the botched trade. He said that although he had not been involved in the ill-fated strategy, he had confidence that it could be managed without posing a risk to JPMorgan’s balance sheet.
“We’re going to be prudent about any of our moves,” he said. “This trade, although large, is certainly not substantial enough to cause a problem in the context of our capital.”
JPMorgan’s chief investment office could remain in the spotlight for weeks, as the firm tries to unwind the trade and faces questions from regulators. Mr. Zames, who was approached by the firm’s chief executive, Jamie Dimon, on Friday night about taking the position atop the beleaguered group, said he had not hesitated.
“What appeals to me is helping JPMorgan and making sure the firm is moving in the right direction,” he said.
Here is a copy of the memo:
Message from Chief Investment Officer Matt Zames
I am proud of the firm’s efforts over the past several days to address our mistakes and pleased to join the dedicated employees in our Chief Investment Office today.
A new leadership team has agreed to help me augment the already strong staff that will continue supporting CIO. Rob O’Rahilly will lead the CIO team in EMEA, reporting to me. Christopher Chan will continue his role leading CIO in Asia but he will report to me. Marie Nourie will become CFO of the global group, reporting jointly to Doug Braunstein and me.
Chetan Bhargiri will join our CIO management team as Chief Risk Officer, reporting to John Hogan.As a result of these announcements, Achilles Macris will transition his CIO responsibilities.
The Global Fixed Income business is in good hands under Daniel’s leadership. He has been a terrific partner. J.P. Morgan’s Fixed Income unit is an integral part of the Investment Bank, and I sincerely thank all of my colleagues in the business for their dedication and outstanding performance the past seven years.
Our CIO staff is very talented, and I am excited to work with my new team. Together, we will have a sharp, renewed focus on our hedging strategies, risk management and execution. JPMorgan Chase will come out of this experience as a stronger firm.